WAIVER AND CONSENT
Exhibit
10.14
Reference
is made to that certain Securities Purchase Agreement, dated as of May 17,
2006,
by and among Sequiam Corporation, a California corporation (the “Company”)
and
the investors (the “Investors”)
identified therein, as amended by that certain Amendment and Additional Issuance
Agreement, dated as of June 21, 2006 (the “Purchase
Agreement”),
to
that certain Amended and Restated Certificate of Determination of Preferences,
Rights and Limitations of Series B 10% Convertible Preferred Stock, filed with
the Secretary of State of the State of California on May 9, 2006 (the
“Certificate”),
those
certain common stock purchase warrants issued to each Investor (the
“Warrants”),
and
to that certain Registration Rights Agreement, dated as of May 17, 2006, by
and
among the Company and the Investors (the “Registration
Rights Agreement”).
WHEREAS,
on or
about March 8, 2007, Biometric Investors, L.L.C., a Delaware limited liability
company (the “New
Lender”)
acquired from Xxxxxxx X. Xxxx, Attorney-in-Fact for the Trust Under the Will
of
Xxxx Xxxxxxxxxxx (the “Prior
Lender”),
that
certain Second Amended, Restated and Consolidated Senior Secured Term Note,
dated November 1, 2005 (the “Note”),
made
by the Company in the amount of $3,650,000;
WHEREAS,
the New
Lender has also acquired the interests of the Prior Lender in the Related
Agreements, as defined in the Note, and in that certain Forbearance Agreement,
dated as of November 22, 2006, made by the Company and the Prior Lender (the
“Forbearance
Agreement”);
WHEREAS,
on
March 8, 2007, the Company received written notice (attached as Exhibit A)
from
the New Lender that an Event of Default occurred under the Note and the Loan
Documents (as defined in the Forbearance Agreement) when the Company failed
to
pay amounts due under the Note as of October 10, 2006, and that the Forbearance
Termination Date, as defined in the Forbearance Agreement has passed (the
“Default
Notice”);
WHEREAS,
if the
Events of Defaults described in the Default Notice are not cured, the New Lender
has indicated that it will provide the Company with notice of the UCC sale
which
the New Lender will schedule to liquidate the collateral for the
Note;
WHEREAS,
on
March 8, 2007, the Company received a term sheet (the “Term
Sheet”)
(attached as Exhibit B) stating the terms on which the New Lender is prepared
to
further amend and restate the Note and enter into a new credit agreement with
the Company providing for the advance of an additional loan amount as provided
in the Term Sheet and the issuance of warrants to the New Lender as contemplated
under the Term Sheet and thereby cure the Event of Default described herein
(collectively, the “Proposed
Transaction”);
WHEREAS,
in
connection with the Proposed Transaction, the Company must amend its Articles
of
Incorporation to increase its total authorized shares from 200,000,000 to
300,000,000 (the “Amendment”);
WHEREAS,
the
Purchase Agreement, the Certificate, the Registration Rights Agreement and
the
Warrants issued to the undersigned preclude the Company from completing the
Proposed Transaction and the Amendment without obtaining the prior written
consent and waiver of the undersigned.
NOW,
THEREFORE BE IT RESOLVED,
for and
in consideration of the mutual covenants and agreements herein contained and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged and confessed, the Company and the undersigned hereby agree
as follows:
1. Consent
& Waiver.
The
undersigned hereby:
(a) acknowledges,
approves of and consents to the Proposed Transaction and the Amendment and
further acknowledges that the consummation of the Proposed Transaction and
the
Amendment will not give rise to a termination or default under the Purchase
Agreement, the Certificate, the Warrants and the Registration Rights Agreement;
(b)
waives
Section 4.13 of the Purchase Agreement in connection with the Proposed
Transaction and the Amendment and further approves the termination of Section
4.13 of the Purchase Agreement and the replacement of Section 4.13 in its
entirety with the following: “Intentionally Deleted”;
(c) waives
Section 4.14 of the Purchase Agreement in connection with the Proposed
Transaction and the Amendment and further approves the termination of Section
4.14(a) of the Purchase Agreement and the replacement of Section 4.14(a) in
its
entirety with the following: “Intentionally Deleted”;
(d) approves
the amendment of Section 4.14(b) of the Purchase Agreement to read as
follows:
“From
the
date hereof until such time as no Purchaser holds any of the Securities, the
Company shall be prohibited from effecting or entering into an agreement to
effect any Subsequent Financing involving a “Variable Rate Transaction”. The
term “Variable
Rate Transaction”
shall
mean a transaction in which the Company issues or sells (i) any debt or equity
securities that are convertible into, exchangeable or exercisable for, or
include the right to receive additional shares of Common Stock, except for
any
options or warrants exercisable into Common Stock of the Company, either (A)
at
a conversion, exercise or exchange rate or other price that is based upon and/or
varies with the trading prices of or quotations for the shares of Common Stock
at any time after the initial issuance of such debt or equity securities, or
(B)
with a conversion, exercise or exchange price that is subject to being reset
at
some future date after the initial issuance of such debt or equity security
or
upon the occurrence of specified or contingent events directly or indirectly
related to the business of the Company or the market for the Common Stock or
(ii) enters into any agreement, including, but not limited to, an equity line
of
credit, whereby the Company may sell securities at a future determined
price.”;
(e) waives
Section 3(b) of the Warrants in connection with the Proposed Transaction and
the
Amendment;
(f) waives
Sections 7(b), 8(b), 9(a)(vii), (9(a)(ix), 10(a), 10(b), and 10(e) of the
Certificate in connection with the Proposed Transaction and the Amendment and
further approves the termination of Sections 10(a) and 10(b) of the Certificate
and the replacement of Sections 10(a) and 10(b) in their entirety with the
following: “Intentionally Deleted”;
(g) acknowledges
that a Triggering Event, as defined in Section 9(a) of the Certificate has
not
previously occurred and to the extent that a Triggering Event has occurred,
the
undersigned hereby waives any such Triggering Event and any penalties associated
therewith;
(h) acknowledges
that it has heretofore consented to the withdrawal of the Registration Statement
on Form SB-2 previously filed with the SEC pursuant to Rule 477 under the
Securities Act of 1933, as amended; and
(i) waives
Sections 2(a), 2(b) and 6(b) of the Registration Rights Agreement in connection
with the Proposed Transaction and further approves the termination of the
Registration Rights Agreement in its entirety.
2. Effect
of Consent & Waiver.
Except
as expressly set forth herein, the transaction documents entered into between
the Company and the undersigned (the “Transaction
Documents”)
shall
remain in full force and effect. Except as expressly set forth herein, this
instrument shall not be deemed to be a waiver, amendment or modification of
any
provisions of the Transaction Documents or of any right, power or remedy of
the
undersigned, or constitute a waiver of any provision of the Transaction
Documents (except to the extent herein set forth), or any other document,
instrument and/or agreement executed or delivered in connection therewith,
in
each case whether arising before or after the date hereof or as a result of
performance hereunder or thereunder. Except as set forth herein, the undersigned
reserves all rights, remedies, powers, or privileges available under the
Transaction Documents, at law or otherwise.
IN
WITNESS WHEREOF,
the
undersigned has executed this instrument as of this __ day of Xxxxx,
0000.
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Title:
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